Pan Am Unions Set to Hold Key Talks With Braniff on Concessions

Pan American World Airways union officials plan to meet today with representatives of Braniff Inc. to begin talks on the massive concessions by labor that Braniff says are needed to complete the merger of the two airlines.

Pan Am Corp. tentatively agreed late Wednesday to spin off its main airline business and merge it with Dallas-based Braniff if Braniff can get pledges of $200 million in wage and work rules concessions from the unions for each of the next four years. Pan Am has said it has been unable to get such concessions.

The transaction, developed by Chicago financier Jay Pritzker, who owns 97% of Braniff, provides for Pan Am employees to own between 13% and 20% of the merged company.

Margaret Brennan, chairwoman of the Joint Labor Coalition, which consists of four of Pan American’s five major unions, said in a telephone interview Thursday that the first meeting with Braniff officials will take place today.

Depends on Choices

Under terms of the agreement reached Wednesday night, the deal with the unions must be struck by Dec. 22 and ratified by the unions by Jan. 19.

“Under the right circumstances, the unions would absolutely be willing to give these concessions,” said one person close to the unions who declined to be identified by name. “It all depends on what the choices are.”

To gain the concessions, he added, Pan Am would need new “quality management and a major infusion of capital.” He said more capital would be needed than the $50-million loan to Pan Am by Braniff that is a part of Wednesday night’s agreement.

The union coalition has said that it would be willing to make concessions of $180 million a year, but that is not sufficient for Pan Am.

Tom Lambert, president of Pan Am’s Flight Engineers International Assn., said Thursday that his union has already made its share of the required concessions to the airline, including a 16% pay cut, reduced vacations and modified work rules. He added that such concessions would be given to any Pan American management.

The pilots union, a part of the coalition, agreed earlier to make $55 million in concessions but made the continued independence of the airline a condition of the offer.

Pilots May Balk

“The pilots could be the stumbling block,” said Louis Marckesano, airline analyst with the Philadelphia-based brokerage of Janney, Montgomery Scott. “The pilots may not want to see the company broken up and may not give concessions” to Braniff.

The pilots are represented by the Air Line Pilots Assn.

Separately Thursday, Braniff reported third-quarter net earnings of $1.59 million on revenue of $82.1 million. The figures compare to a $61,000 profit and $60.7 million in revenues during the same period in 1986. For the first nine months of 1987, the company said, it lost $7.76 million on revenue of $218.18 million.